Answer:
Option B is correct.
The NPV is positive, so invest.
Explanation:
Year Cash Flow
0 -160000
1 8995
2 8995
3 8995
4 205995
$13,512.46
b. Accept a lower average annual rate of return
c. Sell some of her bonds and use the proceeds to purchase stocks
d.Place the entirety of her portfolio in bonds
Answer:
You didn´t post the complete information of the exercise, I searched the exercise online and tried to ask the most useful question.
Explanation:
There is a direct relationship between the risk of Juanita's portfolio and it's average annual return.
Note: Risk and return are directly proportional to each other.
Juanita currently earns a return of 4.5% that is currently she holds portfolio B and she wishes to earn a return of 9.5% that is portfolio D. Then
Sell some of her bonds and use proceeds to buy stocks
Accept more risk.
Suppose, Juanita modifies her portfolio to contain 75% diversified stock and 25% government risk free bond, that is she choose combination D. The average annual return of this type of portfolio is 9.5% but the standard deviation is 15%, the returns will typically (about 95% of the time) vary from a gain of 39.5% to a loss of - 20.5%.
95% confidence = 2 × SD = 2 × 15 = 30
Gain = 9.5 + 30 = 39.5
Loss = 9.5 - 30 = - 20.5
Answer:
The project should be rejected because the costs are larger than the benefits.
Explanation:
EAW = equivalent annual worth = equivalent annual benefit - equivalent annual cost
equivalent annual cost = ($6,150,000 x 12%) + $115,000 = $853,000
equivalent annual benefit = $775,000
EAW = $775,000 - $853,000 = -$78,000
since the EAW is negative, then the project should not be carried out.
Another way to calculate this is by dividing benefits by costs. If the answer is 1 or higher, then the project should be accepted:
B/C = $775,000 / $853,000 = 0.9086 ≤ 1, project rejected
Answer:
Predetermine overhead rate as a percentage of direct labor cost is 120%
Explanation:
To calculate the predetermined overhead rate, we first need to determine the total overheads under the balance of $3980 for two jobs.
The total cost of both jobs which are uncompleted equals,
Total cost both jobs = (660 + 560) + (460 + 740)
Total cost both jobs = 1220 + 1200 = $2420
Thus, the overhead cost involved in both jobs is,
Total Overhead cost = 3980 - 2420 = $1560
This total overhead of $1560 has been absorbed on the basis of a predetermine overhead rate based on the direct labor cost. The total direct labor cost involved under both uncompleted jobs is,
Total direct labor cost both jobs = 560 +740 = $1300
So, the predetermined overhead rate is,
Overhead rate = Total overheads / total direct labor cost
Overhead rate = 1560 / 1300
Overhead rate = $1.2 per $1 of direct labor cost
Expressed as a percentage of direct labor cost, it is:
% Overhead rate = 1560 / 1300 * 100 = 120% of direct labor cost
Answer:
b. $1.82m
Explanation:
Capital Intensity ratio = Total aasets / sales
1.5 = Total Assets / 9m
Total Assets = 9m x 1.5 = 13.5
ROE = Total Income / Shareholders equity
27% = Total Income / (13.5 x 50%)
27% = Total Income / 6.75
Total Income = 27% x 6.75
Total Income = 1.8225
Total Income = 1.82 (Rounded)
The correct option is b. $1.82m.
Answer: template method
Explanation:
The bottom-up approach for estimating times and costs that uses costs from past projects that were similar to the current project is known as template method.
It should be noted that estimating time and cost are vital because it helps schedule work, develop needs of cash flow and show progress of a project.
The bottom-up approach for estimating costs and times using information from similar past projects is called analogous estimating. This method, used in project management, relies on previous experience and expert judgment.
The method you're referring to is the analogous estimating. In project management, analogous estimating is a technique for estimating the duration or cost of an activity or a project using historical data from a similar activity or project. This bottom-up approach is most reliable when the previous activities are similar in fact and not just in appearance to the current activity. This technique relies heavily on experience, expert judgment, and the project history to predict costs and timelines for a new project.
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Answer: closed shop
Explanation:
From the question, we are informed that in the late 1930s management at Atalanta Industries agreed to hire only those workers who were already members of the Electrical Union.
It should be noted that here, Atlanta agreed to a type of arrangement known as closed shop. This occurs when the workers have to belong to a particular union before they'll be employed. This was legal in 1930 but it was later declared illegal by Taft Hartley Act.